Fashion Square owner files for Chapter 11 bankruptcy | Business premises
Washington Prime Group Inc., which owns part of the Charlottesville Fashion Square shopping center, has filed for Chapter 11 bankruptcy.
The move comes after reports earlier this year that the company was preparing a potential bankruptcy filing after ignoring an interest payment on its debt.
The company has stakes in 102 properties, but Fashion Square in Albemarle County is one of five properties that Washington Prime Group no longer operates because it is in receivership.
In a press release, the company said it had secured $ 100 million in “debtor-in-charge financing” to support day-to-day operations during the Chapter 11 process.
“The COVID-19 pandemic has created significant challenges for many businesses, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the company’s outstanding debt,” the statement said.
Washington Prime Group will use Chapter 11 to implement a corporate-level financial restructuring of its debt that will “strengthen its business and operations in the future,” the statement said.
At the end of 2019, the mortgage guaranteed by Fashion Square was transferred to special service because, due to the loss of certain tenants, “the borrower informed the lender that the projected future cash flows will be insufficient to ensure future compliance with the mortgage loan ”. Washington Prime Group said in its latest quarterly report.